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April 07, 2011PRINCE EDWARD ISLAND BUDGET 2011 Yesterday, Prince Edward Island released its 2011-12 Provincial Budget.
Economic outlookThe Prince Edward Island economy is expected to continue a slow recovery from a mild recession in 2009. The Provincial Budget assumes that real GDP grew by 1.9 per cent in 2010, based on strong employment growth of 2.6 per cent. PEI also enjoyed strong growth in immigration last year.
For 2011, the Provincial Budget assumes that real GDP growth will slow to 1.7 per cent. Both residential and non-residential investment are expected to decline. The PEI Budget notes that there are mostly downside risks to its projection for the economy: faltering demand in the US, higher currency and/or oil prices could all weigh on the Island's economic performance.
Fiscal policy The 2011-12 PEI Budget projects a deficit of $42.0 million, following on the 2010-11 deficit forecast of $53.7 million. Revenue growth is projected to be 1.9 per cent as own-source revenues are rising while Federal source revenues are falling.
PEI's net debt will reach $1.85 billion in 2011-12. TD Economics estimates that PEI's net debt will reach 36.0 per cent of GDP in 2011.
The PEI government anticipates returning to balance by 2014.
Expenditures PEI total Provincial spending is forecast to grow by only 1.3 per cent in 2011-12.
Health and Wellness spending is estimated to rise by 3.5 per cent.
Education and Early Childhood Development spending is estimated to rise by 2.6 per cent.
Taxation PEI's tobacco taxes will rise by $5.90 per carton of cigarettes.
To view the 2011 Prince Edward Island Budget
click here
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